Virgin America opts to enter crowded Hawaii market as pressure lingers elsewhere in its network

Virgin America has followed through on previous declarations that it could begin service to Hawaii by YE2015 with the firming of plans to launch flights from San Francisco to Honolulu and Maui during 4Q2015.

The airline is entering a crowded market with ample existing service from all three airports serving the San Francisco Bay area - San Francisco international, Oakland and San Jose. Virgin America is well aware of those competitive dynamics; but has concluded that the market can absorb more capacity.

Virgin America is opting to enter the Hawaiian market as it faces tough conditions in transcon markets during 2015 and with its new Dallas Love Field flights. At the same time its stock price has dropped and its unit costs are forecast to rise. All those factors are creating headwinds for Virgin America as it works to sustain its profitability in 2015.